WTO and Domestic Support under USA Farm Act 2014 : Implications for Developing Countries

Agriculture subsidies in developed countries have been a major stumbling block in Doha Round negotiations. Developed countries are providing huge subsidies to agriculture sector and thereby create distortions in the international market. Some of the developed countries are enjoying comparative advantage due to large amount of subsidies and thus, adversely affecting the welfare of millions of farmers in developing countries like India. Among the developed countries, USA is one of the prominent providers of trade distorting support to agriculture sector. USA is giving huge support to farmers under various programmes which are governed by USA Farm Act. The USA Farm Act 2014 has restructured as well as repealed many programs related to different commodities. Direct Payments, Counter-Cyclical Payments (CCPs), Average Crop Revenue Election (ACRE) Program, are repealed under Farm Act 2014. This Act introduced new programs like Agriculture Risk Coverage (ARC) and Price Loss coverage (PLC) to protect farmers in terms of revenue and price loss respectively. This Act makes several changes to the existing federal crop insurance program. With cotton not covered by the ARC or PLC program, a new crop insurance policy called Stacked Income Protection Plan (STAX) is made available for cotton producers. For other crops, a similar type of policy called Supplemental Coverage Option (SCO) is introduced by Farm Act 2104. In this context, the main objective of this paper is to critically examine the commodity and insurance programmes of USA Farm Act 2014 with reference to domestic support under Agreement on Agriculture and Doha round negotiations